Airlines ‘burdened by high taxes’

European airlines are being “burdened by high regulatory and infrastructure costs”, according to a world air transport group.


An example of the burden is “the inefficiency of European airspace”, said the International Air Transport Association (Iata).

The European region is expected to generate a net airline profit of $2.8bn this year, which represents only $3.23 per passenger.

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Overall, global spending on air transport is expected to reach $746bn in 2014, with the number of passengers likely to increase 5.9 per cent to $3.3bn, Iata said.

It added that airfares are expected to fall 3.5 per cent in real terms (taking inflation into account).

The air transport industry was likely to facilitate $621bn in tourism spending, while aviation is supporting around 58m jobs worldwide.

Airlines will take delivery of 1,400 aircraft this year worth around $150bn.

Iata said airlines are expected to earn a net profit of $18bn in 2014 compared with earnings of $6.1bn in 2012 and $10.6bn last year.

Iata director general Tony Tyler said: “Aviation is a catalyst for economic growth. Airline revenues now total 1 per cent of global gross domestic product.

“Airlines themselves remain burdened with high taxes and weak profitability. With a net profit margin of just 2.4 per cent, airlines will retain only $5.42 per passenger carried. There is a mismatch between the value that the industry contributes to economies and the rewards that generates for those who risk their capital to finance the industry.”

He called for governments to improve regulations, provide cost-efficient infrastructure and reduce the tax burden.